Parametric disaster insurance risk pools African Risk Capacity Limited (ARC), Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC), the Pacific Catastrophe Risk Insurance Company (PCRIC), and the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), have signed a Memorandum of understanding (MOU).
At the same time, the businesses will also explore a joint reinsurance facility to facilitate access to the capital markets.
Each of these organizations form the Sovereign Risk Pools, which were established to serve sovereign climate and disaster risk insurance objectives to nearly 100 nations globally.
At a recent summit held by Centre for Disaster Protection and global reinsurance broker, Gallagher Re, the Sovereign Risk Pools, which all provide parametric disaster insurance to their members, signed an MOU, in order to drive further collaboration within the group.
Under the MOU, ARC, CCRIF, PCRIC and SEADRIF all agreed to:
- establish principles defining development insurance programmes;
- use pre-arranged finance to support SDG country development objectives, including protecting vulnerable populations,
- accelerate innovation;
- expand access to disaster risk finance for public benefit; and
- seek the capital required to reach scale globally.
At the same time, the summit also embraced representatives of the World Bank Group, Hiscox, the UK’s Foreign, Commonwealth & Development Office (FCDO), the Sustainable Markets Initiative, the Insurance Development Forum, the Global Shield and the Global Shield Solutions Platform.
Each of these businesses joined in on the strategic discussions about disaster finance trends and gaps, as well as how the Sovereign Risk Pools can collaborate to scale-up the availability of pre-arranged disaster finance to serve public disaster response needs.
In addition, the pools confirmed a shared interest in exploring the establishment of a joint reinsurance facility that will serve global risk transfer access to global capital markets. This is highly important and needed in addition to base capital required to enable expanded insurance offerings to countries.
ARC Ltd. CEO Lesley Ndlovu, said: “We are pleased that the pools also agreed to collaborate more extensively to develop parametric models and to further explore meso- micro and replica schemes to complement sovereign-level risk transfer. This is our area of expertise, and where we can share knowledge and best practices.”
